Creditors changing arbitration clauses

For many credit card holders, new wording has been incorporated into arbitration clauses that provide an opt-out provision without penalty.

In the past, those who opted out of arbitration clauses often found they were denied credit or service. Now creditors are including a clause that states that it won’t impact their ability to maintain their credit lines.

Citibank recently sent the notices out to cardholders in print that was larger, bolder and more legible than the usual arbitration clause fine print. Other banks and credit card issuers followed suit.

Arbitration clauses have been under scrutiny since spring when the Consumer Financial Protection Bureau issued a lengthy report faulting the process as favoring companies and causing consumers to waive their right to take a dispute to court.

The new terms give consumers a certain number of days to opt out of arbitration, however, most require notice be given in writing and sent by snail mail.

When opting out, it’s best to send the letter by certified mail so that there’s a record to prove it was received. Also keep a copy of the letter in a safe place in the event a dispute arises and the consumer wishes to resolve the matter in court.

PayPal has an opt out agreement but in order to do so, the consumer must use a form they provide and it must be sent by snail mail to the company’s litigation department. PayPal does have their opt-out agreement in all capital letters. The agreement is for new users only.

It is important to read the new agreements thoroughly because many of the clauses contain strict guidelines for opting out. If not followed completely, the company can argue that the clause is not in effect.

Carol Thompson is a veteran investigative reporter residing in central New York. She spent 23 years with a local newspaper, The Valley News, before leaving for the Syracuse New Times, and now, VNN. Thompson has won dozens of first-place awards for investigative reporting and was the 2006 recipient of the Syracuse Press Club’s prestigious Selwyn Kershaw Professional Standards Award. Thompson’s reporting has resulted in the arrest of public officials and has prompted policy changes. She uncovered two money laundering schemes that traveled the globe and resulted in the indictments of several developers.